Contract Manufacturing and Design Services Market Size, Share & Segmentation, By Services (Electronic Design & Engineering, Electronic Assembly, Electronic Manufacturing, Others), By End-use (Healthcare, Automotive, Industrial, Aerospace & Defense, IT & Telecom, Power & Energy, Consumer Electronics, Others), By Region, and Global Forecast for 2023-2030

Contract Manufacturing and Design Services Market Report Scope & Overview:

The Contract Manufacturing and Design Services Market size was valued at USD 515.4 billion in 2022 and is expected to grow to USD 1088.83 billion by 2030 and grow at a CAGR of 9.8% over the forecast period of 2023-2030.

In 2022, electronic manufacturing became a significant service category, contributing 44% of the total revenue share. However, because OEMs are increasingly turning to outsourcing for their designing needs, the electronic design and engineering segment is expected to grow at a faster rate during the forecast period. Electronic circuit boards are in greater demand on the market as a result of their increasing significance in a number of important electronic devices, such as tablets and cell phones. With more than 47% of the market revenue in 2022, the IT and telecom segment emerged as the largest end-use segment. Nonetheless, it is anticipated that throughout the projection period, expanding outsourcing trends in the automotive, healthcare, and other non-technical sectors will boost their market shares. In terms of the market as a whole, the healthcare sector had the highest CAGR in 2022. Healthcare facilities utilize a variety of information systems, such as clinical decision support systems, e-prescription systems, EHR systems, practice management support systems, and radiology information systems. These systems store a great deal of private patient and hospital data.

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KEY DRIVERS: 

• Growing need for high-quality electronic products

One of the main drivers of market revenue growth is the growing need for high-quality electronic products, including tablets, laptops, and smartphones. Another factor is the growing need for outsourcing manufacturing services for electronic gadgets. The rapid evolution of the electronics industry and the growing consumer demand for state-of-the-art electronic products are driving up demand for electronic contract manufacturing and design services.

• Growing ubiquity of mobile devices

RESTRAIN:

• High cost of cutting-edge equipment

OPPORTUNITY:

• Technological Advancement

The technologies and sub-technologies that are the main focus of the electronic contract manufacturing and design services include computers, consumer electronics, networking, servers and storage, telecommunications, and peripherals. The companies that manufacture and distribute their products use these services to list their products, offer repair services, and handle returns. Urbanization, growing disposable income, and technological developments are additional factors propelling the market's revenue growth.

CHALLENGES:

• Cut Costs and Improve Operational Effectiveness

The market for electronic contract manufacturing and design services is largely driven by cost containment and operational effectiveness. Companies can save a lot of money by contracting with specialized service providers to handle their electronic manufacturing and design processes. Because of their economies of scale, contract manufacturers and design service providers can purchase materials and components at a reduced cost. They can cut expenses even more because they have effective supply chain management systems and optimized manufacturing processes in place. Businesses can increase their profitability and market competitiveness by taking advantage of these cost advantages. Outsourcing also enables businesses to concentrate on their strategic goals and core skills, which boosts productivity and operational efficiency.

• Lack of competent and workers

IMPACT OF RUSSIAN UKRAINE WAR

Supply chains are being put to the test once more in the wake of the Covid-19 pandemic, this time due to the conflict in Ukraine. Organizations now need to strengthen the resilience of their supply chains even more because of the conflict; many are attempting to shift away from sourcing raw materials from Russia and East Europe and toward more regional or localized approaches. The sharp increase in commodity prices, which has had a significant impact on the supply chain, has included gasoline and diesel. In the meantime, in order to meet demand, businesses everywhere are being compelled to look for alternate sources of labor and materials. Ashray Lavsi, Senior Manager at global procurement and operations consultancy Efficio, says that as disruption spreads around the world.

As we've already seen, supply disruptions have directly led to a massive spike in commodity prices. sharp increase in inflation. This follows a period when Covid-19 and other factors have already had an impact on markets current supply chain difficulties. The crisis in Ukraine is probably going to keep driving up the price of energy, raw materials, transportation, and online services. The world's prices of oil and gas, in particular, have already surged dramatically because of the increased reliance on imports from Russia, which provides 40% of the gas used in Europe. Recent reports claim that the eurozone economy is suffering as a result of the ongoing increase in energy costs. which has witnessed a decline in growth.

IMPACT OF ONGOING RECESSION

History demonstrates beyond a shadow of a doubt that a recession is difficult on not only manufacturing procedures, but also across all tiers of our economy, from consumers to actions. Economic instability is a challenge that both consumers and manufacturers must deal with, and given the status of our economy right now, pressure to do so is evident. But history also shows that economic downturns are cyclical and a normal aspect of the market's wax and wane. To protect their company's finances, decision-makers in the manufacturing sector can keep an eye out for warning signs of a recession and spot trends in the American economy. They can then be flexible and resilient by switching to new processes like 3D printing. Recessions can lengthen wait periods for subcomponents to finish assemblies and cause shortages in supplies. Economic data shows that there is always a significant decline in production during a recession, which is followed by a significant increase in output. Regarding forecasts for the future, a recession's abrupt onset of increased production is a reliable indicator that the downturn has ended.

MARKET SEGMENTATION

By Services

• Electronic Design & Engineering

• Electronic Assembly

• Electronic Manufacturing

• Others

By End-use

• Healthcare

• Automotive

• Industrial

• Aerospace & Defense

• IT & Telecom

• Power & Energy

• Consumer Electronics

•  Others

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REGIONAL ANALYSIS

According to projections, the Asia Pacific region will grow at the fastest rate, followed by North America and other areas. Asia Pacific held the biggest market share in 2021 and is expected to continue growing at the fastest rate between 2023 and 2030. Furthermore, China commanded the largest share of the Asia Pacific market in 2022 with a market share of over 36.0%. The main drivers of the growth of the regional market are the accessibility of raw materials and the low cost of labor.

The growing demand from the automotive and medical industries is predicted to propel the growth of North America's market for electronic designs and manufacturing services. One significant sector that contributes to this region's high profit margin is the medical industry. Numerous healthcare facilities and margin of profit in this area. In North America, there are numerous hospitals and R&D facilities that focus primarily on developing sophisticated and portable diagnostic devices, which they intend to contract out to third-party manufacturers. Over the course of the forecast period, all of the previously mentioned factors are expected to support regional market growth.

REGIONAL COVERAGE:

North America

• US

• Canada

• Mexico

Europe

• Eastern Europe

  • Poland

  • Romania

  • Hungary

  • Turkey

  • Rest of Eastern Europe

• Western Europe

  • Germany

  • France

  • UK

  • Italy

  • Spain

  • Netherlands

  • Switzerland

  • Austria

  • Rest of Western Europe

Asia Pacific

• China

• India

• Japan

• South Korea

• Vietnam

• Singapore

• Australia

• Rest of Asia Pacific

Middle East & Africa

• Middle East

  • UAE

  • Egypt

  • Saudi Arabia

  • Qatar

  • Rest of Middle East

• Africa

  • Nigeria

  • South Africa

  • Rest of Africa

Latin America

• Brazil

• Argentina

• Colombia

• Rest of Latin America

KEY PLAYERS

Some of key players of Contract Manufacturing and Design Services Market are Benchmark Electronics Inc., Celestica Inc., Compal Electronics Inc., Creating Technologies LP, Flextronics International Ltd., Hon Hai Precision Industry Co. Ltd., Jabil Circuit Inc., Plexus Corporation, Fabrinet, Venture Corporation Limited, and other plyers are listed in a final report.

Benchmark Electronics Inc-Company Financial Analysis

RECENT DEVELOPMENT

• Taiwan-based Compal Electronics, Inc. authorized the purchase of 65% of Poindus System Corporation, a Point-of-Sale (POS) system hardware manufacturer, in February 2022. Through this acquisition, Compal Electronics hopes to broaden its line of products and increase its exposure to the market.

  Contract Manufacturing and Design Services Market Report Scope:

  Report Attributes	Details
  Market Size in 2022	US$  515.4 billion
  Market Size by 2030	US$ 1088.83 billion
  CAGR	CAGR of 9.8%   From 2023 to 2030
  Base Year	2022
  Forecast Period	2023-2030
  Historical Data	2019-2021
  Report Scope & Coverage	Market Size, Segments Analysis, Competitive  Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook
  Key Segments	By Services (Electronic Design & Engineering, Electronic Assembly, Electronic Manufacturing, Others), By End-use (Healthcare, Automotive, Industrial, Aerospace & Defense, IT & Telecom, Power & Energy, Consumer Electronics, Others)
  Regional Analysis/Coverage	North America (US, Canada, Mexico), Europe (Eastern Europe [Poland, Romania, Hungary, Turkey, Rest of Eastern Europe] Western Europe] Germany, France, UK, Italy, Spain, Netherlands, Switzerland, Austria, Rest of Western Europe]), Asia Pacific (China, India, Japan, South Korea, Vietnam, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (Middle East [UAE, Egypt, Saudi Arabia, Qatar, Rest of Middle East], Africa [Nigeria, South Africa, Rest of Africa], Latin America (Brazil, Argentina, Colombia Rest of Latin America)
  Company Profiles	Benchmark Electronics Inc., Celestica Inc., Compal Electronics Inc., Creating Technologies LP, Flextronics International Ltd., Hon Hai Precision Industry Co. Ltd., Jabil Circuit Inc., Plexus Corporation, Fabrinet, Venture Corporation Limited
  Market Opportunities	•Technological Advancement
  Market Challenges:	•Cut Costs and Improve Operational Effectiveness                                                                                                      •Lack of competent and workers